The United Arab Emirates (UAE) announced Tuesday that “all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” alleging that Iran had fired two ballistic missiles toward it. 

The country’s foreign ministry said the decision comes “in light of regional escalations that undermine regional and international peace and security.”

Earlier Tuesday, the UAE’s Ministry of Defense reported that two missiles launched from Iran toward the country, both of which fell into the sea. The statement said it “affirms its readiness to respond to any threats and to resolutely counter any attempts to undermine the security of the country or the safety of maritime navigation in the region.”

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Esmaeil Baghaei, a spokesperson for Iran’s foreign ministry, rejected the Emirati claim on Tuesday, saying that it “undermines ongoing efforts to strengthen trust between countries in the region and prevent the escalation of insecurity,” according to the semi-official Fars news agency. 

“The impact on the Iranian economy could be significant,” Simon Henderson, director of the Bernstein Program on Gulf and Energy Policy at the Washington Institute, tells TIME. “The UAE is one of the top non-oil trading partners with Iran.”

As of April, the UAE accounts for 12.5% of Iran’s exports and 30.43% of its imports, according to Iranian news agency WANA. 

Iran’s dollar currently ranks as the least valuable currency in the world, and its government told a Russian news agency in April that the war has already cost it some $270 billion in direct and indirect damages.

Regional instability amid the war in Iran

Stability in the region is fragile, as a number of incidents have been recently reported in the Strait of Hormuz. On Tuesday, a vessel reported that it had been struck by an unknown projectile, causing damage to the engine room and a crew casualty, according to the U.K. Trade Maritime Operations Centre (UKMTO). Last Thursday, a separate vessel was struck by a drone. 

The UAE has previously reported the detection of missiles coming toward it, most recently on July 12, when it confirmed that a missile fell outside of its borders.  

In May, the defense ministry reported that it had intercepted six unmanned aerial vehicles within 48 hours that “attempted to target civilian and vital areas in the country.”

One drone, launched from the direction of the UAE’s western border, struck an electricity generator near the Barakah Nuclear Energy Plant on May 17. Its origin has not been confirmed and is under investigation.

During the first few weeks of the conflict, Iran launched a series of more aggressive strikes on targets in the UAE, hitting military, energy, and civilian infrastructure. Iran’s Islamic Revolutionary Guard Corps (IRGC) vowed at the time to “punish aggressors throughout the region,” pointing toward U.S. military assets stationed in the country, as well as other Gulf states. 

Tehran resumed targeting U.S. allies in the Middle East, including Kuwait, Qatar, and Bahrain during the return to hostilities in early July, when negotiations based upon a Memorandum of Understanding collapsed. 

Where do peace plans between the U.S. and Iran stand?

Peace talks between the United States and Iran have made little progress in recent weeks.

President Donald Trump said Tuesday that “there are no talks or conversations going on, or scheduled,” between the U.S. and Iran. He also reaffirmed that the naval blockade on Iranian ports and vessels remains in place, amid ongoing claims that the Strait of Hormuz is “open and operating.”

Marine traffic data suggested Wednesday that some ships were indeed passing through the Strait, but still at significantly lower levels than before the conflict began. 

Earlier this week, the President also threatened to “bomb the s---” of Oman, a U.S. ally and mediator between Washington and Tehran, should it “get in the way” of U.S. attempts to gain  effective international control of the Strait of Hormuz. 

Oman and Iran have reportedly been working toward an agreement to manage traffic through the Strait, which carries roughly a fifth of the world’s oil and gas supply. 

The International Criminal Court (ICC) said Wednesday that it “deplores” sanctions imposed this week by the U.S. State Department on its president, Judge Tomoko Akane, and Abdoulaye Seye, a Senegalese senior trial lawyer for the Office of the Prosecutor.

The State Department announced the sanctions Tuesday, accusing Akane and Seye of having “directly engaged in efforts by the ICC to investigate, arrest, detain, or prosecute officials whose government has not consented to ICC jurisdiction.” 

The sanctions include the freezing of assets in the country, blocking financial transactions, and prohibiting entry to the U.S. They were imposed under an Executive Order issued by President Donald Trump in February 2025, which reads: “The United States unequivocally opposes and expects our allies to oppose any ICC actions against the United States, Israel, or any other ally of the United States that has not consented to ICC jurisdiction.”

Neither the U.S. nor Israel is a state party to the Rome Statute, the treaty that founded the ICC and went into effect in 2002, and therefore do not recognize the jurisdiction of the court. 

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“These sanctions are a flagrant attack against the independence of an impartial judicial institution which operates pursuant to the mandate conferred by its states parties,” the ICC statement said. “Such measures targeting judges, prosecutors and staff who work towards the fulfilment of the mandate that was conferred to the ICC by states undermine the rule of law.”

The Court further warned that the sanctions put “international legal order” at risk.

In his first term, Trump imposed sanctions on ICC Prosecutor Fatou Bensouda and another senior official, Phakiso Mochochoko. These were later lifted under the Biden Administration. 

The ICC says that nine of its 18 judges are now under sanctions from Washington, as well as both deputy prosecutors, a former prosecutor, and one other member of staff. 

Why does the Trump Administration oppose the ICC?

Announcing the sanctions on Tuesday, Secretary of State Marco Rubio called the ICC a “corrupt and fatally politicized supranational court.” He accused it of repeated attempts “to assert authority over nationals of the United States and other countries that have not consented to its jurisdiction or ratified the Rome Statute.”

The Trump Administration has long pushed back against the ICC’s investigations and charges against nationals from both the U.S. and Israel. February’s Executive Order said the ICC’s recent actions against both countries “set a dangerous precedent.”

The State Department also launched a campaign in July to “dismantle” the ICC’s jurisdiction, saying it will “systematically disable the ICC’s ability to operate, target American servicemen or officials, or otherwise threaten American sovereignty.” 

But the tensions trace back to Trump’s first term, when the ICC sought to investigate possible war crimes committed by the CIA and military personnel in Afghanistan. Bensouda requested authorization in 2017 to investigate those allegations. Trump then brought sanctions against her in 2020.

The U.S. has also rebuked its actions in recent years against Israel.

In November 2024, the ICC issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and the recently dismissed Defense Minister Yoav Gallant. Both were accused of “crimes against humanity and war crimes" pertaining to the ongoing Israel-Hamas War, including “starvation of civilians as a method of warfare” and “intentionally directing attacks against a civilian population.”

The conflict was ignited by Hamas’s terror attack in southern Israel on Oct. 7, 2023, which left some 1,200 people dead and 250 taken hostage. Since then, over 73,000 Palestinians have been killed in Gaza—1,262 of whom have been killed since a cease-fire began last October, according to Gaza’s Ministry of Public Health on Aug. 15. 

The prosecutor also pursued arrest warrants for Hamas leaders Mohammed Deif, Ismail Haniyeh, and Yahya Sinwar, all of whom have since been killed. 

During Rubio’s Senate confirmation hearing in 2025, he addressed the warrant for Netanyahu. “This is a test run. This is a trial run to see, ‘Can we go after a head of state from a nation that’s not a member?’” he said, adding: “If we can go after them and we can get it done with regards to Israel, they will apply that to the United States at some point.”

Israel has denied the ICC’s war crimes accusations and challenged its jurisdiction. The Pre-Trial Chamber initially rejected that challenge, but in April 2025 the Appeals Chamber sent it back for reconsideration. The arrest warrants against Netanyahu and Gallant remain in effect.

Netanyahu commended Rubio’s sanctions announcement on Tuesday, describing the ICC as “a kangaroo court that cloaks its abuse of power in the language of international law while undermining the very principles of justice.”